ESCONDIDO – Palomar Pomerado Health officials yesterday aired their concerns about a potential site where some city leaders want a new $531 million hospital to be built.

City officials have been pushing the 32-acre site near Washington Avenue and Spruce Street as an alternative to the hospital district's desire to build in the city's new business park.

The district rejected the Spruce site in March but recently agreed to examine it further.

The two sides have been at odds for months about where to build the hospital. Last month, the district recently began looking at a site in San Marcos as talks with Escondido became more and more testy.

However, recent meetings have been much more cordial. The two sides met again yesterday to hash out the Spruce site's pros and cons. No final decision was made.

A decision, however, is expected by Aug. 31. That's when the district's option to buy 52 acres in the Escondido Research and Technology Center is set to expire. The 186-acre business park is under construction west of Interstate 15 and south of state Route 78.

District officials maintained that the Spruce site is smaller and more expensive than the business park. They also had serious environmental concerns with the Spruce property, citing county records that show storage tanks had been buried underground in various spots. It was not clear what had been stored in those tanks or if anything had leaked into the soil.

City Councilman Ed Gallo, who attended the meeting, said the district had done its homework in judging the site and came up with some new information. But he said he had doubts that there were any environmental problems with the land since a milk company operated there for years.

"It's not dead in the water, but we didn't come to an agreement," Gallo said. "I can tell you that my sense was that they weren't thrilled (with the site). Obviously it's not their favorite spot and we all know that."

District officials declined to comment, citing an agreement with city officials that City Manager Clay Phillips would be the spokesman for any media inquiries.

Phillips said, "I think the bottom line is they feel like it's more expensive than the ERTC site, which is their concern. . . . When you're having to spend a lot of money looking at environmental issues, it's obviously a lot easier to look at the site that doesn't have those."

Another major sticking point for district officials is the ability to build around the new hospital in future years – something they say can't be done at the existing Palomar Medical Center downtown.

"They don't want to get landlocked in the future like they feel they are now," Phillips said.

The proposed Spruce site consists of 16.6 city-owned acres, including the city's maintenance yard, and 6.4 acres belonging to the North County Transit District. The hospital would need to acquire property from a handful of private owners to make the site work.

The city would need to move its maintenance yard to make way for the hospital. A preliminary estimate showed it would cost several million dollars, Phillips said.